She said, he said: Q&A with auditing standards board leaders

The new chair and vice-chair of Canada's Auditing and Assurance Standards Board talk about what's to come for the AASB over the next year.

Canada's Auditing and Assurance Standards Board (AASB) has a new chair, Cathy MacGregor, CA, and vice-chair, Darrell Jensen, CPA, CA, for the 2014-2016 term. They discuss their views on being a standard-setter and what's to come for the AASB in the next year.

Meet the chair

Cathy MacGregor is from a small town on the northern shore of Nova Scotia, graduated from Saint Francis Xavier University and, for the past 25 years has practised with Grant Thornton LLP where she is currently national director of assurance quality. Her experience ranges from providing audit services to small private entities and not-for-profits, to large publicly listed entities. MacGregor has been a member of the AASB five years, the past two years serving as vice-chair.

She is married to a CA, has young sons and a dog, Finn. When not setting-standards, she can be found supporting her favourite sport, hockey, at the local rink.

Meet the vice-chair

Darrell Jensen is originally an East Coaster, having grown up on the south shore of Nova Scotia. Jensen attended Saint Mary's University and started his career with Ernst & Young LLP in Halifax. He moved to Toronto, then Edmonton and is now back in Toronto.

Over his 27 year career with EY, Jensen has worked with public, private and not-for-profit entities in a variety of industries. He's now a partner in the firm's Toronto national accounting and assurance practice where he consults on a variety of complex auditing and accounting matters. Jensen also leads EY's audit quality inspection-related activities and works closely with his firm's public company audit regulators.

He's been an AASB member since March 2010. Jensen and his spouse enjoy travelling and summer weekends at the cottage with their dog, Farley.

When and why did you become interested in standard-setting?

CM: I've had an interest in auditing standards since the early years of my career. The audit profession is unique where standards impact what we do day-to-day. My interest piqued when, in 2008, I was appointed national auditing standards partner at Grant Thornton and soon after I was invited to join the AASB.

DJ: I've been highly involved in supporting the quality of assurance engagements in my organization for a while now, so I appreciate the importance of having high-quality standards for Canadians. It's such an important aspect of assurance quality.

You both have had interesting and varied career experiences. Is there anything that stands out that you'd like to share with someone who is just starting out?

DJ: I have lived and worked in three provinces and had a brief secondment in Australia. Every place has had a unique need or challenge. I have also served a large variety of clients in a number of industries and sectors over my career. The perspective gained from this variety is invaluable.

CM: While there are numerous work-related experiences that are noteworthy, the one that stands out is my ability to maintain a strong work/life balance. There was a time when I was about to make the difficult decision to leave the profession and focus on my young family, but I was convinced by my professional mentor that I could maintain a healthy work/life balance through a very unique flexible work arrangement. It accommodated my personal needs while maintaining my role as a partner of a professional services firm. And despite the reduced hours, I've continue to advance to more senior levels within the firm.

Why should the business community at large pay attention to standard-setting?

CM: High-quality standards protect the public by ensuring quality information and reporting occurs in the marketplace. One of the best possible ways we ensure high-quality standards is through the consultation process with the business community and other key stakeholders. We conduct research into various and different perspectives before we reach a conclusion. In a way, the business community's participation in standard setting is key to ensuring the health of our markets.

DJ: As Cathy mentions, the standards we issue are ultimately designed to serve the public interest. Each member of the business community is affected by these standards. Their input — whether in the form of participation at roundtables, forums, surveys or their responses to documents for comment — is critical to the development of high-quality standards. Without active participation, we run the risk of the standards being not as relevant as they could be.

Is volunteering important to you? Why?

CM: To have a strong voice and the ability to directly influence an outcome is incredibly rewarding. And it may sound like a cliché, but I like to make a difference. So yes, volunteering is definitely very important to me. In addition to serving on the AASB, I've been involved in Nova Scotia's [CA] institute, serving on the council and its professional standards committee. This philosophy extends outside of my professional life — over the years, I have served on numerous not-for-profit boards and even helping out with my sons' hockey teams.

DJ: Volunteering is incredibly important. This is where people with diverse backgrounds and perspectives come together to explore and collaborate to achieve something great. For example, I am currently the co-chair of the joint AASB-Canadian Bar Association committee to update their Joint Policy Statement. The group consists of members of the legal community who deal with various aspects of the Joint Policy Statement, auditors from large and small firms, and financial statement preparers (including preparers who have both an accounting and legal background). I see such a great interchange of ideas between the group members, each of whom show a strong commitment to developing a new Joint Policy Statement that is relevant and reflective of today's environment.

What does the AASB mean to you?

CM: This is a tough one! The AASB represents the interests of Canadian stakeholders. "Stakeholders" is a simple word, but it represents such a broad group — users of financial statements, preparers, auditors and the public at large. And to me, that means it plays a critical role in the Canadian marketplace.

DJ: I completely agree. The commitment behind the AASB really impresses me — both at the staff and board levels. Staff and board members spend significant time and effort to understand the needs of the various stakeholders in Canada. The broad experiences of the board and the body that oversees our work, the Auditing and Assurance Standards Oversight Council, brings a range of perspectives — from professionals engaged in public practice from large, mid-sized and smaller firms, public-sector auditing, as well as academics. It just helps to further ensure our standards are of high quality.

What do you foresee as being the top issues the AASB might concentrate on this year?

CM: Two topics that are of course top of mind for both the AASB and our stakeholders are auditor reporting and the relevance of the audit.

DJ: Also, audit quality is an area where we will spend a lot of time. We'll also continue to actively participate in the international standard-setting process to ensure its relevance to practice here in Canada.

Since Canada adopts International Standards on Auditing (ISAs) as Canadian Auditing Standards, does Canada have to compromise in any way in order to adopt the ISAs?

DJ: There's no question that this introduces a degree of complexity. Our participation is very strong with the International Auditing and Assurance Standards Board's activities, and Canada's voice there is respected. I'm impressed with the influence we've had on the development of ISAs. I also think that the perspective we gain by actively participating at the international level gives us a broader perspective and has benefits when we develop Canadian-made standards.

However, there's always going to be an element of compromise when it comes to international standards because of the level of diversity around the globe. But I think it's worth it because of the benefits global competitiveness brings. I would also note that we have the ability to make amendments to ISAs for Canadian-specific circumstances when we feel that it is in the public interest for Canadians.

CM: There is no debating the importance of having one set of standards for auditing — they serve all of us well. We're strongly behind that and it is important. We represent Canadian stakeholders and, as Darrell mentioned, we have a strong voice at the international table. That being said, the topic of auditor reporting might test our current model. Our first priority is, and always will be, to serve the Canadian public interest. It will be interesting to see where we land, so stay tuned!